Canadian small businesses are probably already feeling the tax deadline pressure. A lack of preparation during the business year could lead to last-minute tension and extra tax fees.
Mistakes made while filing your taxes could cost you dearly. Here are five things you should do to make filing taxes much easier.
Canadian small businesses are probably already feeling the tax deadline pressure. A lack of preparation during the business year could lead to last-minute tension and extra tax fees. Mistakes made while filing your taxes could cost you dearly. Here are five tips from Dragons Den you should do to make filing taxes much easier.
Don’t combine your business and personal accounts
Small business owners could sometimes use their personal funds to invest in their company’s growth. While it may seem like the best way to fund your business when you start it, both the company’s and your personal finances could suffer,
Separate your company’s bank accounts from your own, making sure you already know and regularly keep track of what transactions are taking place in both these accounts. When tax season is around, you will find it much easier.
Extend this principle into your credit cards as well. You will find it much easier to keep track of monthly statements once you have already separated your personal and businesses expenses.
Make sure you save all paperwork and receipts
The urge to throw away a receipt is real, but don’t give in, keep all receipts however small. Make sure you store all your paperwork and receipts in labelled files or folders so that you will find them easy to sort out at the end of the financial year.
Seek advice from experts
You are not a tax expert, so seek out advice from one. Don’t hesitate to spend money on an accountant, or you could lose money in the long run. Keep track of deductions you are entitled to and keep a separate folder for monitoring those.
Double check everything
Double-check every number on the tax filing check for spellings of words and signatures. The most common errors found include incorrect social insurance numbers and wrong postal codes. If you have made an error, you can amend your tax return later, but save the hassle and make sure it is error-free in the first place. Make sure you have not overlooked anything. Asking another person to check everything before you file is also a good way to check for errors you may have overlooked.
Use accounting software and professional ways to deal with accounting tasks
Using a spreadsheet to keep track of financials could seem like an easy task when you first startup. As you make more transactions per day, you will realize that it is not as efficient as you thought. Using accounting software could solve this problem, and you could make the whole process much more efficient. The professional accounting software keeps track of all necessary information and identifies trends in sales apart from giving you a quick overview when you need it.